How to Analyze Rental Vehicles

How to Analyze Rental Vehicles

Calculate costs, projected cash flow and long-term returns for rental vehicles.

If you're interested in buying rental vehicles, it's important to correctly estimate your projected cash flow and returns before purchasing a vehicle or a fleet.

Sharelytics DealCheck gives you powerful rental analysis tools to make it easy to analyze rental vehicles, Turo's and carsharing rentals in just a few minutes.

This tutorial will show you how to analyze a typical rental car.

Adding a New Vehicle

Step 1: Click the 'Add Vehicle' Button from the My Vehicles list

Navigate to the rentals list and click the Add Vehicle button at the top right

Step 2: Fill in the Vehicle Description

The first step is to enter basic details about the vehicle, including a name, type and city. All of the fields here are optional, so you can fill in as many details as you want.

Here are the most important fields to fill in:

  • Name: this will be the name of the vehicle used throughout our app. Some people simply use the vehicles year/make/model, while others like more creative names, like "Hot Rod in South Beach, Excellent Condition".
  • Vehicle Type: select the type of the vehicle from the available options. This field is important for comparisons and valuation.
  • Vehicle Class: select the class of the vehicle from the available options. This field is important for comparisons and valuation.
  • City: search and select the city, as well as to access the markets records later.
  • Details: enter any of the basic vehicle facts that you know about this vehicle, including year, make, model, transmission type, color, etc.
  • Turo/Getaround: if this vehicle is listed on Turo or Getaround, enter the URL for future data enrichment.

Click the Next button at the bottom of the page to continue to the next section.

Step 3: Enter the Purchase Information

The next section describes the vehicle purchase.

Here is what you should customize:

  • Purchase Price: the amount you're paying to purchase this vehicle.
  • After Repair Value: the estimated market value of the vehicle after any rehab work is complete. If no repairs are necessary, the after repair value is the same as the current market value.
  • Financing: if you're going to use financing to purchase this vehicle, enter the details of your loan in this section, including the loan type, interest rate, and term you'll be paying. Disable financing if this is a cash purchase.
  • Purchase Costs: these are all costs and fees associated with purchasing the vehicle.  Examples include loan fees, dealer fees.
  • Rehab Costs: if you're planning to do any up-front rehab work on this vehicle, enter an itemized list of all rehab expenses. Leave this as $0 if the vehicle is already rent-ready.

Click the Next button at the bottom of the page to continue to the next section.

Step 4: Enter the Cash Flow Information

Use the Cash Flow section to enter the projected rent you're going to collect from your guests/renters, as well as all operating expenses you're going to have.

  • Gross Rent: the total gross rent you expect to collect from your guests/renters.
  • Inactivity: every rental vehicle is going to have some downtime. Enter the percentage of time you expect the vehicle to remain unutilised/vacant here.

Next, customize the yearly recurring expenses.

Click the Next button at the bottom of the page to continue to the next section.

Step 5: Customize Other Assumptions & Projections

The final section of the wizard has several additional inputs and projections you can customize to further fine-tune this deal.

  • Income Increase: the anticipated annual increase of the gross rent and any other income. In most cases the vehicle's rent will increase each year and this is the percentage it will increase by.
  • Expenses Increase: the anticipated annual increase of the operating expenses. Expenses will typically rise due to inflation and other factors.
  • Selling Costs: an estimate of the costs and fees associated with selling this vehicle.  We use this as part of the ROI calculation.

When finished, click the Save Vehicle button at the bottom of the page to add this vehicle to your account:

Viewing the Vehicle's Analysis

Now that you've added this vehicle, you can view a full breakdown of the purchase requirements, cash flow and investment returns on the Vehicle Analysis page:

Tip: Hover over the question mark icon next to any metric to view its description.

Viewing Long-Term Buy & Hold Projections

While each vehicle's Analysis page shows the numbers for the first year, you may want to see how this rental vehicle will perform in the future as well.  Click the Buy & Hold Projections tab from the menu on the top.

What's Next?

Once you've added a new rental vehicle, it will remain in your account and you can come back to it at any time from the My Vehicles list.

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